Buying your first home in Adelaide: a first home buyer Adelaide guide

If you are a first home buyer in Adelaide, the short answer is this: buying your first home comes down to four things working together, which are your deposit, your borrowing power, the help you may be eligible for, and a clear step by step plan. Get those four lined up and the process becomes a sequence of decisions rather than one overwhelming leap. This guide walks through each part in plain English, so you know what to expect before you talk to a lender or a broker.

The team at Finance Lab put this together to help you understand the path. We are credit licensed under Australian Credit Licence 389328. Nothing here is personal advice, and whether any loan, grant or scheme suits you depends on your circumstances and the lender’s criteria.

What you need to buy your first home

Buying a first home in Adelaide usually means pulling together a few moving parts at the same time. Here is the high level path that the government money guidance service Moneysmart sets out: make a plan to save for a deposit and research first home buyer assistance, compare loans across different lenders or consider using a mortgage broker, understand the loan features that matter to you such as an offset account, use calculators to work out what you can afford, and then manage your repayments over the life of the loan.

You do not have to do all of this at once. Most people start with the deposit and their borrowing power, because those two numbers shape everything else.

How much deposit do you need

Your deposit is the cash you put towards the purchase, and the rest is the loan. A larger deposit generally means you borrow less and may pay less interest over time.

Lenders also look at how big your loan is compared with the value of the property. Where the loan is high relative to the property value, a lender may require lenders mortgage insurance, which is an insurance that protects the lender, not you, if the loan cannot be repaid. A larger deposit may reduce or remove the need for lenders mortgage insurance, though whether it applies depends on the lender and your circumstances.

If you are still saving, it can help to map out a target and a timeline. The exact figure depends on the property price you are aiming for and the suburb you want to buy in. For a closer look at how lenders weigh your loan against the property value, see What is lvr first home buyer.

What you can borrow

Your borrowing power is the amount a lender may be willing to lend you, based on your income, your expenses, your existing debts and the lender’s own criteria. It is not a fixed number, and different lenders can reach different figures for the same person.

A good first step is to estimate your repayments and borrowing capacity using a calculator. A mortgage calculator can estimate principal and interest repayments, indicate borrowing capacity, and show how extra repayments could shorten the loan term. Keep in mind that calculator results are estimates only, and actual amounts may be higher or lower, because the figures assume the interest rate stays constant for the full term and do not account for every fee or your personal situation.

Try the borrowing power calculator to get a working estimate before you talk to a lender.

One detail worth weighing carefully is the interest rate. Small differences in a mortgage interest rate can make a big difference to the long term cost of a home loan, so the rate and the fees are worth comparing closely across lenders before you commit.

First home buyer help: who may qualify

There are several forms of government assistance that first home buyers in South Australia may be able to use. Eligibility, amounts and property value limits change over time and depend on your circumstances, so the figures below are deliberately left to the official source rather than stated here.

The step by step path to buying your first home in Adelaide

Here is a simple sequence many first home buyers follow. Buying a first home in Adelaide tends to run in this order, though your own path may differ.

Remember that Moneysmart, as a government money guidance service, does not lend money, arrange loans or provide personal financial advice. That is where a licensed broker can step in to do the comparing and the paperwork with you.

Choosing where to buy in Adelaide

Suburb choice affects both your budget and the deposit you need, because price points vary widely across Adelaide. It can help to look at a few areas that fit your budget and lifestyle, then test the numbers for each one with a repayment estimate. There is no single right answer here. It depends on what matters to you, from commute to schools to future plans.

Frequently asked questions

Talk to the team at Finance Lab

If you would like help working through your deposit, your borrowing power and the assistance you may be eligible for, the team at Finance Lab can walk you through it and compare loans across lenders for you. Reach out when you are ready to map your path to your first home.